Levy v. McClellan

not belong to the.citizens of the country generally by common right.”^[4] It is clearly not lands or tenements. Hereditaments are things capable of being'inherited. Certainly a personal right or privilege would not be inherited, but would go to the personal representatives, and not to the heir. The Legislature could not, I apprehend, defeat this provision of the Constitution by requiring that all personal property should be called real estate, so that property which has universally been regarded as personal property should be thereafter assessed as real estate. The provision of the Constitution is that the power to borrow should not exceed ten per cent of the assessed valuation of real estate as it appeared by the assessment roll of the said city. Before the adoption of the provision taxing franchises the real property or real estate of corporations exercising public franchises .was assessed, but a franchise as distinct from the real property owned by the corporation was never included in such assessment, and this was the condition of the law when the constitutional provision was adopted. Thus the rails of a railroad affixed to the street were assessed as real estate; the pipes of a gas company or water company were assessed as real estate, and the cars used for carrying passengers upon the rails were assessed as personal property; and the provisions of the Revised Statutes and of the-Real Property Law giving a definite meaning to the term “real estate” have never been changed by the Legislature, nor did the provision of the Tax Law under which these assessments are made change that general definition of real estate. Subdivision 3 of section 2 of the Tax Law,^[5] as amended by chapter 712 of the Laws of 1899, provides that the term “real estate” or “real property,” as used in the Tax Law,' shall include these, special franchises. They were thus included ■ within that term only for .the purpose of taxation. In the case of People ex rel. Met. St. R. Co. v. Tax Commissioners ( 174 N. Y. 417 ), it was held that these amendments created a new system, of taxation and brought within its range a new character of property; that the new kind of property was termed real estate just as it might have been termed personal property, or neutral property, without changing its nature; that this property was sui generis and from its nature could not be valued by local officials. It was said that this new property is real estate in name, but not in reality; that it is a mere privilege to do something in public streets and places not permitted to citizens generally and for the purpose of taxation was denominated real estate. - .The other question as to which I do not agree with the referee is as to the obligations of the city upon contract obligar tions which the referee finds on the 30th of June, 1908, were over $54,000,000. The referee holds that this sum is not to be deducted. As was said by the Court of Appeals in Bank for Savings, etc., v. Grace ( 102 N. Y. 313 ), the constitutional prohibition “ is aimed at an actual, not a theoretical indebtedness — at a "substantial liability which can be discharged only by the enforcement of a tax or an assessment which, when levied, will be a charge upon the taxpayer and a burden for him tó remove.” Accepting this situation under which hundreds of millions' of dollars of obligations of the city in the sinking fund have been deducted, it is ■apparent that this obligation of the city to pay the amount to be paid upon these